Ponte Gadea Buying 50 Milk St. for $170M

BOSTON-Proving plenty of life remains in the commercial real estate sales sector–especially for core product–Spanish investor Ponte Gadea Group is acquiring 50 Milk St. for close to $170 million. Sources say the price far exceeds the $123 million the 21-story, 275,000-sf office building fetched barely two years ago. It also beats the prognostications made when the asset was put up for sale in August.

“It’s a shot of good news,” one source tells GlobeSt.com, particularly given the dour mindset among industry participants. Eastdil Secured was retained to sell 50 Milk St. just as the subprime mortgage morass was seeping across to the commercial side. Talk of discounts and rampant re-trading led some experts to warn that even well-regarded deals were facing a price correction. Many are still predicting a 10% to 15% discount from peak levels and say the depressed climate could linger into 2008.

Cities such as Boston, however, appear to be bucking any such trend. Property continues to move through the sales pipeline, often accompanied by hefty price accretion. The ongoing wave of overseas capital is one reason. Irish funds are particularly active locally, but cross-border funds are hardly unilateral. The Middle East and Germany are well-represented, Australian investors are returning, and 50 Milk St.’s Spanish suitor is poised to make its second high-profile deal in the city in a matter of months.